Would Abbott’s GST full stop turn into a comma?

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Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

Tony Abbott is asking a lot of voters who have political memories when he asks them to take at face value his line that “the GST won’t change, full stop”.

What immediately springs to mind is John Howard’s “never ever”.

Howard in May 1995 said: “There’s no way that a GST will ever be part of our policy”.

“Never ever?”, asked a journalist to which Howard replied “Never ever. It’s dead. It was killed by the voters in the last election.”

In fact, it wasn’t dead. It was just resting, after having taking some bad knocks when Paul Keating failed to get it up and Liberal leader John Hewson lost in 1993 partly because of it.

Howard, long a supporter of a broad-based consumption tax, which as treasurer he has unsuccessfully tried to get the Fraser government to adopt, breathed new life into the policy in 1998.

He justified the broken promise by taking the GST policy to the 1998 election, at which he lost a swag of seats.

It was a reasonable argument. But really, once is enough for that party trick.

Abbott started out this campaign with a clear and sensible tax policy. He would have a review of taxation generally and any changes he wanted to make would be put to the following election.

But the political flaw was always the danger of a Labor scare campaign. Kevin Rudd has been running hard on the fear factor. “Will it be increased? When will it go to food?” he asked during the debate.

Clearly the opposition has become concerned the Labor might take hold (although they hadn’t seemed to be biting).

So the Coalition is now adopting the never, ever position - though not in those words. Abbott started it in Sunday’s debate, frontbencher Christopher Pyne articulated it on Q&A, and Abbott was emphatic today.

“Let me be as categoric as I can, the GST won’t change, full stop, end of story. Let me repeat it - the GST won’t change full stop, end of story.”

“Never ever” has become “full stop”.

Abbott also highlights the point that the states' consent is needed for changes to the GST, and there are Labor states. But the recent trend has been for states to go conservative, and there have been times when all states are of one complexion.

The Abbott “full stop” position is seriously flawed. If you are having a tax inquiry, you can’t sensibly leave out the GST, which many experts say should be increased or broadened or both to deal with the growing revenue hole. And if you let the inquiry look at it, it’s quite likely to recommend changes. How does a government then say, “sorry, those recommendations might be sensible, but we said we wouldn’t do anything”?

Or, would it say, “That was then. These recommendations make a good case – we will take them to the election. After all, that was our original position”?

Abbott tried today to fob off questions about the review. “I don’t know what people are going to raise in the review. I just don’t. All sorts of things will be put forward by all sorts of people. I am telling you the GST won’t change. It is not going to change, full stop end of story”.

Pyne was in a tangle on Monday night.

“Apparently we will be having a review of the Tax Act. The GST is one of our taxes,” he said.

“If the review says the GST should be increased, the commitment from the Tony Abbott opposition is that we will not change either the GST or the basket of goods and services upon which it applies. That is a commitment.”

Pushed on why in that case the Coalition would then have it in the tax review, Pyne said: “Well, why not? Why shouldn’t it be included? … It’s a tax .. Why shouldn’t we have a proper and thorough review of the whole tax system?”.

But if the government of the day said it would not change the GST “then that is a political decision. … But that doesn’t mean that the review shouldn’t look at the Tax Act in its entirety … There will be no change to the GST in an Abbott government”.

This political fix the Coalition has just put in to neutralise Labor’s scare campaign doesn’t stack up. It’s either very bad policy – have a review but say beforehand that you won’t act on potentially sensible ideas that come out of it - or it doesn’t pass the pub test for credibility.